Intertemporal Models of Overlapping Generations

Giuseppe Chirichiello
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Giuseppe Chirichiello: University of Rome

Chapter 3 in Intertemporal Macroeconomic Models, Money and Rational Choices, 2000, pp 62-111 from Palgrave Macmillan

Abstract: Abstract Fisher’s optimal saving rule (Fisher, 1930), like Ramsey’s rule, can be adopted as the criterion for distinguishing the optimal paths in the set of feasible paths of a growing economy. To deduce Fisher’s rule we start by considering the optimal saving problem of a single agent. The model we shall adopt considers a consumer-saver who makes choices over time sequentially. This model, ultimately similar to that of individual demand in a temporary equilibrium context, allows us to deduce a saving theory. Its optimality requisites satisfy Fisher’s optimality intertemporal rule, the equality between the intertemporal marginal rate of substitution for consumption and the rate of interest (see Chapter 2).

Keywords: Fiscal Policy; Overlap Generation; Business Cycle Theory; Saving Function; National Debt (search for similar items in EconPapers)
Date: 2000
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-333-97742-2_3

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DOI: 10.1057/9780333977422_3

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